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Medicare report: Charges vary widely among area hospitals

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Medicare report: Charges vary widely among area hospitals

The average charge for a common medical procedure can differ by as much as five times at Capital Reg
Medicare report: Charges vary widely among area hospitals
St. Mary's Healthcare Amsterdam Memorial Campus Director of Acute Rehab and Transitional Care Cheryl Palmatier adjusts a pillow in one of the rooms in the new third floor wing of the facility in this 2013 photo.
Photographer: Peter R. Barber

The average charge for a common medical procedure can differ by as much as five times at Capital Region hospitals.

Treating severe sepsis cost more than five times as much at Albany Medical Center than it did at Cobleskill Regional Hospital in 2013. Heart failure and shock was 31⁄2 times as much. Simple pneumonia? Triple the cost.

That’s according to a Daily Gazette analysis of federal payment data released earlier this month by the Centers for Medicare and Medicaid. It was the third annual release of Medicare hospital utilization and payment data as part of the Obama administration’s efforts to promote transparency around costs and smarter spending on health care.

By the numbers

A look at the top five Medicare procedures in 2013 at local hospitals:

1. Major joint replacement or reattachment of lower extremity

St. Peter’s Hospital, Albany

&bull; total discharges: 42

&bull; average covered charges: $54,004.10

&bull; average total payments: $20,556.48

&bull; average Medicare payments: $17,463.45

Ellis Hospital, Schenectady

&bull; total discharges: 14

&bull; average covered charges: $67,743

&bull; average total payments: $20,312

&bull; average Medicare payments: $18,737

Saratoga Hospital

&bull; total discharges: 14

&bull; average covered charges: $81,197

&bull; average total payments: $23,278

&bull; average Medicare payments: $22,104

2. Septicemia or severe sepsis without mechanical ventilation for 96+ hours with major complications or comorbidities

Albany Memorial Hospital

&bull; total discharges: 67

&bull; average covered charges: $19,915

&bull; average total payments: $10,182

&bull; average Medicare payments: $8,630

Albany Medical Center Hospital

&bull; total discharges: 165

&bull; average covered charges: $60,683

&bull; average total payments: $16,922

&bull; average Medicare payments: $14,160

St. Mary’s Hospital, Amsterdam

&bull; total discharges: 150

&bull; average covered charges: $22,468

&bull; average total payments: $11,614

&bull; average Medicare payments: $10,898

St. Peter’s Hospital, Albany

&bull; total discharges: 315

&bull; average covered charges: $37,417

&bull; average total payments: $11,859

&bull; average Medicare payments: $10,622

Ellis Hospital, Schenectady

&bull; total discharges: 183

&bull; average covered charges: $38,188

&bull; average total payments: $12,406

&bull; average Medicare payments: $10,906

Saratoga Hospital

&bull; total discharges: 96

&bull; average covered charges: $39,063

&bull; average total payments: $10,878

&bull; average Medicare payments: $9,927

Cobleskill Regional Hospital

&bull; total discharges: 11

&bull; average covered charges: $11,220

&bull; average total payments: $16,185

&bull; average Medicare payments: $15,444

Nathan Littauer Hospital, Gloversville

&bull; total discharges: 53

&bull; average covered charges: $27,252

&bull; average total payments: $12,037

&bull; average Medicare payments: $11,159

3. Esophagitis, Gastroenteritis & Miscellaneous Digestive Disorders

Albany Memorial Hospital

&bull; total discharges: 14

&bull; average covered charges: $12,227

&bull; average total payments: $4,298

&bull; average Medicare payments: $2,863

Albany Medical Center Hospital

&bull; total discharges: 190

&bull; average covered charges: $22,373

&bull; average total payments: $6,582

&bull; average Medicare payments: $4,293

St. Mary’s Hospital, Amsterdam

&bull; total discharges: 29

&bull; average covered charges: $14,728

&bull; average total payments: $4,523

&bull; average Medicare payments: $3,753

St. Peter’s Hospital, Albany

&bull; total discharges: 150

&bull; average covered charges: $18,511

&bull; average total payments: $4,811

&bull; average Medicare payments: $3,529

Ellis Hospital, Schenectady

&bull; total discharges: 108

&bull; average covered charges: $17,260

&bull; average total payments: $5,089

&bull; average Medicare payments: $3,792

Saratoga Hospital

&bull; total discharges: 80

&bull; average covered charges: $18,790

&bull; average total payments: $4,067

&bull; average Medicare payments: $3,170

Nathan Littauer Hospital, Gloversville

&bull; total discharges: 43

&bull; average covered charges: $16,546

&bull; average total payments: $4,903

&bull; average Medicare payments: $3,700

4. Heart failure and shock with complications or comorbidities

Albany Memorial Hospital

&bull; total discharges: 30

&bull; average covered charges: $16,780

&bull; average total payments: $5,780

&bull; average Medicare payments: $4,505

Albany Medical Center

&bull; total discharges: 80

&bull; average covered charges: $32,821

&bull; average total payments: $8,409

&bull; average Medicare payments: $6,472

St. Mary’s Hospital, Amsterdam

&bull; total discharges: 68

&bull; average covered charges: $15,152

&bull; average total payments: $6,160

&bull; average Medicare payments: $5,538

St. Peter’s Hospital, Albany

&bull; total discharges: 142

&bull; average covered charges: $25,891

&bull; average total payments: $6,128

&bull; average Medicare payments: $5,276

Ellis Hospital, Schenectady

&bull; total discharges: 134

&bull; average covered charges: $19,935

&bull; average total payments: $6,357

&bull; average Medicare payments: $5,237

Saratoga Hospital

&bull; total discharges: 64

&bull; average covered charges: $22,353

&bull; average total payments: $5,336

&bull; average Medicare payments: $4,582

Cobleskill Regional Hospital

&bull; total discharges: 19

&bull; average covered charges: $9,483

&bull; average total payments: $8,614

&bull; average Medicare payments: $7,743

Nathan Littauer Hospital, Gloversville

&bull; total discharges: 35

&bull; average covered charges: $25,514

&bull; average total payments: $6,457

&bull; average Medicare payments: $5,750

5. Heart failure and shock with major complications or comorbidities

Albany Memorial Hospital

&bull; total discharges: 27

&bull; average covered charges: $18,586

&bull; average total payments: $8,095

&bull; average Medicare payments: $6,788

Albany Medical Center

&bull; total discharges: 47

&bull; average covered charges: $51,203

&bull; average total payments: $15,500

&bull; average Medicare payments: $11,214

St. Mary’s Hospital, Amsterdam

&bull; total discharges: 64

&bull; average covered charges: $20,474

&bull; average total payments: $9,300

&bull; average Medicare payments: $8,602

St. Peter’s Hospital, Albany

&bull; total discharges: 106

&bull; average covered charges: $40,077

&bull; average total payments: $9,901

&bull; average Medicare payments: $9,039

Ellis Hospital, Schenectady

&bull; total discharges: 102

&bull; average covered charges: $31,335

&bull; average total payments: $9,456

&bull; average Medicare payments: $8,236

Saratoga Hospital

&bull; total discharges: 35

&bull; average covered charges: $37,486

&bull; average total payments: $10,659

&bull; average Medicare payments: $8,582

Nathan Littauer Hospital, Gloversville

&bull; total discharges: 15

&bull; average covered charges: $28,004

&bull; average total payments: $9,703

&bull; average Medicare payments: $9,156

Source: Centers for Medicare and Medicaid

Now for some context: The average charge is typically nowhere near what the patient pays. It doesn’t include Medicare reimbursement, insurance coverage or other kinds of coverage. And while some variation in the average charge should be expected since each hospital sets its own charge structure, the annual data dump is designed to shine a light on where huge variations do exist and get consumers to start asking why.

The Gazette analysis found that among Capital Region hospitals, Albany Medical Center routinely charged the most and Cobleskill Regional Hospital routinely charged the least for the most common medical procedures covered by Medicare in 2013, the latest numbers available. The most common procedures include major joint replacement, severe sepsis, digestive issues, heart failure and shock, kidney and urinary tract infections, and kidney failure, among other things.

“We’re a Level 1 Trauma Center, so some of our costs are going to be higher because we have to have specialists available constantly,” said Albany Med spokesman Jeffrey Gordon. “We’re also a teaching hospital, so we have higher overhead and higher reimbursements to cover the cost of educating medical students. And we treat a high proportion of low-income people who may not have any insurance. The truth is the price that most people care about is the out-of-pocket cost, and that differs everywhere and for everyone.”

The cost of the most common procedure Medicare covers — major joint replacement — has been on the rise in recent years, with nationwide averages increasing from $50,116 in 2011 to $54,239 in 2013.

Locally, a knee or hip replacement cost anywhere from $54,004 at St. Peter’s Hospital to $81,197 at Saratoga Hospital in 2013. The actual patient responsibility is impossible to discern from publicly available data, but total payments including Medicare reimbursement and payments made by patients through co-pays, co-insurance and deductibles averaged anywhere from $20,312 to $23,278.

The No. 1 thing affecting patients’ out-of-pocket costs is their insurance status. Among the insured, the cost could vary based on how high a deductible has been set, how much of that deductible they’ve paid out at the time of a procedure, and whether a service requires a co-pay or co-insurance.

At Ellis Medicine in Schenectady, the volume of calls from people looking to price check a hip replacement or CT scan or imaging procedure has increased in recent years.

“It’s usually the elective procedures and obviously not the acute, ER type visits that they call about,” said Ellis CFO and Vice President of Financial Services Mark Mesick. “They want to know where they can go for a lab test or imaging or elective surgery that will cost them the least. And if we know their plan and their member ID, we can tell them some of the cost but if we don’t know how much of their deductible they’ve used up we can’t.”

To further the cause of price transparency, New York passed a law last year that went into effect this spring requiring hospitals and physicians to post prices online for procedures and alert patients if they’re going to receive care from an out-of-network provider.

It was dubbed the Emergency Services and Surprise Bills law for a reason. An increasing number of patients were getting so-called surprise bills after fairly common procedures. For example, a woman who gave birth at a hospital that was covered by her insurance might get hit with a surprise bill from an out-of-network anesthesiologist the hospital contracts with who gave her an epidural. The new law also protects consumers from bills for out-of-network emergency services.

The fewer surprise bills, the better, and not just for patients, health care executives say.

“There’s probably a perception that hospitals aren’t so transparent with their charges and pricing, but it’s really just because charges and reimbursement can be such a complicated thing,” said Mesick. “But more and more of our reimbursements are being tied to patient experience. If a patient had an otherwise fine experience but got stuck with a surprise bill, that can drive that reimbursement down.”

Ellis Hospital, in addition to posting financial disclosure information online, has updated its website to include a charge estimator. A drop-down menu on its website lists the average prices for a medical procedure at the Schenectady-based hospital system. You can look up the average charge Ellis sets and the average payment it actually gets for a number of procedures ranging from bronchitis and asthma to heart attacks and kidney failure.

One example: If you walk into Ellis with chest pain, the hospital says that costs them about $11,546. What they actually get paid for treating that chest pain is much lower, though. Between Medicare reimbursement, insurance coverage, co-pays and out-of-pocket costs, the average payment comes in around $3,326.

People don’t usually shop around for maladies like chest pain, though. Patients being treated for an emergency or trauma generally don’t concern themselves with the cost after the fact. While the new state law helps protect against surprise bills stemming from emergency visits, hospitals are also increasingly relying on financial navigators to counsel patients on their bills and any resources available to them.

“If we had a patient who contacted us, concerned about their ability to pay a bill, we would ask them to speak to one of our financial counselors because we’re not going to turn anybody away for care,” said Joan Ehlinger, CFO at St. Mary’s Healthcare in Amsterdam. “We can help them work through it, whether it means getting them charity care or providing an uninsured discount.”

Albany Med offers similar counseling, with navigators on staff who help people enroll in the state’s online health exchange or determine their out-of-pocket cost for an upcoming procedure.

“The goal is to make people much more aware of what the costs are that go into providing and receiving medical care,” said Gordon. “There are a lot of options out there for coverage, between government programs or commercial programs. It can be challenging to tell someone what their out of pocket cost will be, but we try to help them when we can.”

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